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Renewable Portfolio Standards: Changing the Industry

Deck:

Updates and Forecast for 2017

Byline:

Brian Nese and Allison Post Harris

Author Bio:

Brian Nese co-leads the Stoel Rives energy team and is a partner in the Energy Development group and the Renewable and Thermal Energy Initiatives. Allison Post Harris advises energy companies on transactions related to the siting, acquisition, land use, financing, development, operation and disposition of power production and transmission facilities.

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Renewable portfolio standards ("RPS") have been prevalent in the United States for several decades and have played a major role in the successful deployment of renewable energy across the nation. Since 1983, when Iowa implemented the first RPS, environmental and human health concerns have driven legislatures in 29 states1 to enact an RPS. Those states have committed to enforceable renewable energy policies that discourage non-compliance through various forms of monetary disincentives. Eight other states2 have adopted renewable portfolio goals and objectives that lack the mandatory nature of standards, but signal each state's desire to incorporate renewable energy sources in its energy portfolio. In a genuine demonstration of the states acting as laboratories for policy and innovation, each state has independently set different RPS benchmarks and has implemented its unique RPS. For example, some states' RPS only applies to certain energy supplier types (e.g., investor owned utilities versus cooperatives), while other states set different standards for different types of energy suppliers. Some states vary the time frame for accomplishing the RPS requirements, and some states cap the amount utilities must spend on renewable energy in relation to conventionally produced energy. The types of energy sources that qualify as renewable resources vary across the states, with such qualifications oftentimes reflecting the fuel sources that occur in abundance in a state, such as wind energy in Kansas, swine waste in North Carolina, coal mine methane in Pennsylvania, ocean-generated energy in Maryland and solar energy in California.

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